ECB staff held direct talks with 67 firms to gauge price expectations

The ECB’s latest company check-in is basically a reality test for the euro-area economy. Staff spoke with 67 large non-financial firms between March 23 and April 1, 2026, to hear what was happening on the ground — not in models, but in orders, wages, costs, and pricing. The headline is sturdier than you might expect: most firms said business in the first quarter was good or getting better. But the catch is timing. Those conversations landed just as energy worries were building, and before any later fallout could fully show up. ### What exactly did the ECB do? This is part of the ECB’s regular outreach to big companies across the euro area. The point is simple — policymakers want a fast read on how firms are seeing demand, costs, employment, and selling prices before official data fills in the picture. In this round, the sample was 67 leading non-financial companies, and the talks happened over a tight window from March 23 to April 1. ### What did firms say about demand? They mostly described first-quarter momentum as good or improving. A few companies said the year had started slowly, but that was not the dominant story. Services were still the main engine, which fits the broader euro-area pattern, but orders and production were also picking up in manufacturing and construction. That matters because those sectors had been the weak spots for a while. ### Was the Middle East shock already hurting activity? Not much — at least not yet. Firms did mention specific disruptions tied directly to the region, like weaker travel flows and sales exposure in or through the Middle East. But by late March, incoming orders were not yet showing a broader demand slump linked to the conflict. That is the key nuance here: the ECB got a snapshot of resilience, but it was an early snapshot. ### What about consumers? Consumer spending was still growing at a steady clip, but companies expected some softening in the months ahead. Retailers described intense competition. Food companies said shoppers were still trading down toward discounters because food prices remained high. Clothing retailers saw decent first-quarter growth too, though slowed. ### Why does this matter for inflation? Because the ECB is trying to judge whether higher energy prices stay contained or spread. Its March 2026 projections already assumed the conflict would lift near-term inflation and weaken growth. Headline inflation was projected at 2.6% for 2026, with growth at 0.9%. If firms are still seeing decent demand while energy costs rise, that can keep price pressure alive longer than central bankers would like. ### So is the economy fine? Not exactly. It looks resilient, not immune. The company calls suggest the euro area entered spring with more momentum than the headlines might imply. But the official ECB view is that the war in the Middle East has made the outlook much more uncertain, with upside risks to inflation and downside risks to growth. In other words — the economy was holding its. ### Why should anyone outside central banking care? Because this is how rate decisions get shaped before the hard data is complete. If firms keep passing through costs and demand stays firmer than expected, the ECB has less room to ease. If spending and orders crack later, the argument shifts the other way. These company conversations do not settle that debate, but they show where the pressure points are right now. ### Bottom line? The ECB’s firm-by-firm read says euro-area businesses were still moving along reasonably well in late March and early April. But that reassuring signal came right at the edge of a bigger energy and confidence shock. So the real story is not “all clear.” It is “still holding — for now.”